The World Bank has urged Thailand to “play a new game”, breaking free from the middle-income trap to unlock new growth engines.
Thailand must ‘dare to play a new game’ if it wants to escape the middle-income trap and achieve high-income status by 2037, noted the global lender, calling for bold structural reforms, smarter investment in human capital, and a new economic model centred on innovation and competitiveness.
Speaking at the ‘Thailand Economic Outlook 2026’ seminar, Melinda Good, division director for Thailand and Myanmar at the World Bank, said the nation’s traditional growth engines, once hailed for transforming Thailand from a low-income agrarian economy into an upper-middle-income nation within a generation, have stalled for more than a decade.
‘What got Thailand here will not get it there,’ Ms Good said.
‘The growth model that once delivered success is no longer sufficient in a world driven by digital transformation, innovation, and fast-changing global dynamics.’
She said Thailand’s economy has struggled to sustain strong growth in recent years, with GDP expanding by only around 2% in 2025, well below the 5% annual rate needed to achieve high-income status by 2037.
Despite these challenges, the World Bank still believes Thailand has significant potential to regain momentum.
Ms Good urged the country to capitalise on its existing strengths including a strategic location in Southeast Asia, robust digital infrastructure, and a strong global reputation for quality products, channelling these advantages into five key future industries: digital services, advanced and green manufacturing, agribusiness (‘Kitchen of the World’), sustainable and wellness tourism and the creative economy.
To unlock these growth engines, she said Thailand must focus on three versions of competitiveness: green, digital and services.
Ms Good said Thailand’s structural transformation has been frozen for more than a decade, with the share of agricultural employment remaining high and the economy yet to transition meaningfully towards high-value manufacturing or technology-driven farming.
‘Investment in flood management, water management and sustainable agriculture is just as crucial,’ she said. ‘For instance, Thailand’s green water management initiatives in the Eastern Economic Corridor will yield long-term benefits for both sustainability and investment.’
Ms Good said Thailand’s investment in research and development (R and D) and education for future-ready skills remains far below that of economies that have successfully escaped the middle-income trap, such as South Korea, or rapidly advancing peers like Vietnam.
‘Thailand already has many tools in place – from widespread mobile broadband and PromptPay to the Thai ID system and growing foreign direct investment in data centres,’ she said. ‘However, while Thais are highly connected digitally, only about 5% possess intermediate-level digital skills.’
Thailand’s digital startups could attract as much as US$1.8 billion in venture capital annually. To seize this opportunity, the country must urgently invest in digital skill upgrades, said Ms Good.
She also emphasised the need to open up and enhance competitiveness in the services sector by removing regulatory bottlenecks, improving infrastructure and pursuing trade agreements with deeper commitments to services.
‘Thailand’s service sector remains more closed than many of its regional peers, even though it’s among the fastest-growing sectors globally,’ said Ms Good.
‘Liberalising this sector would attract more foreign investment and empower Thai entrepreneurs to compete in digital innovation.’
Thailand has strong advantages in health and wellness tourism, while ‘green services’ offer further potential to drive sustainable growth, she said.
‘Thailand must turn global megatrends into opportunities, especially by going green, going digital, becoming the ‘Kitchen of the World’, leading in digital services and building high-value service sectors,’ said Ms Good.
In October 2026, Thailand is scheduled to host the IMF-World Bank Group annual meetings for the first time since 1991, where global investors and large corporations will gather to discuss precisely these challenges and opportunities, she said.